Ecommerce service provider Speed Commerce has acquired Fifth Gear, a single-source provider of order management, fulfillment and customer care services, for $55 million in cash paid at closing with an additional contingent payment to be made in the form of common shares of Speed Commerce stock, if earned.
The transaction provides Speed Commerce with a diverse list of marquee clients on long-term contracts, adds substantial fulfillment services assets, and solidifies the company’s position as one of the fastest growing providers of end-to-end ecommerce services.
Clients added as a result of the transaction include, among others, Burger King, Lens.com, Smithsonian Institute, Zeeberry.com and popular pet specialty companies, Dog.com, Horse.com and Petbox.
For the 12 months ended September 30, 2014, Fifth Gear’s net revenue exceeded $50 million.
Our company is now better positioned to deliver on our vision of becoming one of the largest full service ecommerce players in the industry,” said Richard Willis, president and CEO of Speed Commerce. “We are excited about the opportunity to win new accounts and cross-sell our services to existing clients, as well as leverage our newly-acquired capabilities to communicate a unique service offering and further strengthen our brand. Additionally, our sales team now has additional fulfillment expertise and resources to support our aggressive pursuit of a newly-enhanced pipeline of client opportunities.”
“Becoming a part of Speed Commerce represents an important strategic step in our go-to-market offering,” said Al Langsenkamp, chairman and CEO of Fifth Gear. “[The acquisition] will allow our combined company to better serve clients and help them deliver a more seamless online shopping experience.”
As a result of the acquisition, the organic growth of existing clients and the addition of new client opportunities, the company expects revenues for its fiscal year ending March 31, 2016 ranging between $180 million to $220 million.
Speed Commerce financed the acquisition and refinanced its existing term loan facility with a new $100 million credit facility led by Garrison Capital. Stifel acted as exclusive financial advisor in connection with this credit facility. Lake Street Capital Markets served as financial advisor to the company in connection with the acquisition of Fifth Gear and originated that transaction.